Apple recorded its third consecutive quarter of lower revenue as it fought lower demand for the iPhone and tough competition from lower-priced competitors.

Revenue in the quarter, between July and September, was US $46.9 billion, down 9 percent on the same period last year and exactly in line with analyst estimates. Net income came in at $9 billion, down 19 percent, the company said Tuesday.

Apple CEO Tim Cook called the results "strong" and said he was "thrilled with the customer response to iPhone 7, iPhone 7 Plus, and Apple Watch Series 2, as well as the incredible momentum of our Services business."

But amid the falling sales and profits, signs of a turnaround on the horizon.

Apple said the current quarter, which includes the key year-end sales period, will be better than analysts had been predicting. It expects revenue to be between $76 billion and $78 billion. If that comes true, it would also represent a hike in revenue on a year-over-year basis, returning the company back to positive growth.

Apple sold 45.5 million iPhones between July and September, down from the 48 million phones sold during the same period in 2015 and slightly ahead of analyst estimates of 45 million units. Revenue from iPhone sales fell 13 percent.

The quarter included the first two weeks of iPhone 7 sales.

After rising for years, iPhone sales began dropping at the beginning of 2016. The phone remains the most popular among consumers, but its share of the market is slowly eroding as smartphone penetration gets higher, customers delay replacing their phones, and a new breed of lower-cost competitors hit the market.

That's especially true in China, where Apple saw massive sales growth last year but has experienced big drops this year. That happened again in the most recent quarter with sales in greater China at $8.8 billion, down 30 percent on the same period last year.